Troubled Dam Project Now Subject of Brazil Graft Probe

Brazilian police issued several search warrants on Friday in a new phase of the Lava Jato corruption investigation, now looking into the world’s third biggest hydroelectric company, Norte Energia, which is suspected of having bribed government officials in order to win a contract to build a dam.

Norte Energia is the third-largest hydroelectric company in the world. (Photo: Hidreletricabelomonte, CC BY 3.0)According to a press release by the Federal Public Ministry, police in the states of Parana and Sao Paulo have issued search warrants for a number of companies linked to Norte Energia, “that have been indubitably favored by federal agents to win contracts for the Belo Monte Hydroelectric Power Plant project.”

The project, originally designed during the military dictatorship in the 1970s, was finally underway in 2010 when then-president Luiz Inacio Lula Da Silva signed a contract with Norte Energia to continue the project.

A partial license from the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) was granted to allow construction of the three dams. However, the project was interrupted by several public lawsuits, suspended licenses, human rights violations, and constitutional violations involving the indigenous groups living in the vicinity of the Xingu River where the dams were to be built.

According to the report, illegal payments were made to government officials and politicians via contracts that included a clause of kickbacks of 1% of the contract value. So far, the police have traced US$4.2million in bribes to a number of individuals and companies including the infamous construction company, Odebrecht.

The investigation has also implicated former Minister of Farming, Agriculture and Planning and former Congressman Antônio Delfim Netto, who is suspected of receiving a 10% cut of the bribe given to the Worker’s Party (PT) and the Brazilian Democratic Movement (PMDB).

The Lava Jato investigation is a probe into corruption in Brazil that has implicated hundreds of politicians, and businessman worldwide, involved in both the Petrobras and Odebrecht scandals.